Facebook shutting down Facebook Deals service after 4 months

Facebook is shutting down its Deals service reports Reuters. Facebook’s Groupon-like deal service launched late April in 5 major cities and offered the ability to cash in on deals local to you and your network.

“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks,” said a spokesperson.

“We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”

Facebook’s Deals service was launched as an obvious response to Groupon and LivingSocial and other local deal sites. Google also responded to the burgeoning market with its own Daily Deals service after it failed to purchase Groupon late last year. Facebook’s product was very similar to any of the others on the market and failed to successfully leverage much of Facebook’s social graph in the way that other products like its games do.

As commenter Mari Smith notes below, Facebook’s Check-in Deals will still be available, it is only the Deals product that had a limited launch earlier this year that is being canceled. Perhaps Facebook has had better luck with deals that are heavily tied to geolocation.

It’s possible that this particular product just didn’t gain traction and that Facebook will abandon the deals market altogether, but I wouldn’t count them completely out of the game yet. It’s posssible that the company will take what it has learned from its first attempt and come back with a more agressive option.